Schaeffer's Midday Options Update Features Boston Scientific, IBM, Applied Materials, Motorola, Johnson & Johnson.

Business Editors

CINCINNATI--(BUSINESS WIRE)--Sept. 15, 2003

Today's Schaeffer's Midday Options Update features Boston Scientific (NYSE:BSX), IBM (NYSE:IBM), Applied Materials (NASDAQ:AMAT), Motorola (NYSE:MOT), and Johnson & Johnson (NYSE:JNJ). The Midday Options Update contains a brief commentary on the day's most notable activity and a table listing the most active calls and puts for the day. The Midday Options Update is published every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link. Each new subscriber will receive a FREE copy of Bernie Schaeffer's Options 101 CD-ROM (a $49.95 value). http://www.schaeffersresearch.com/addinfo.

Schaeffer's Midday Options Update

The market continues to slip lower this afternoon despite more positive indications out of the manufacturing sector. The September Empire State Index rose to 18.4 compared to August's reading of 10 and the consensus estimate of 14. However, August industrial production rose only 0.1 percent versus the Street estimate of 0.3 percent. In addition, capacity utilization came in at 74.6 percent, which was roughly in line with expectations of 74.7 percent. Furthermore, business inventories tumbled 0.1 percent, meeting expectations. Looking ahead to Tuesday, the FOMC will meet to review the economy's recent progress. The Consumer Price Index and weekly chain store sales will also be released tomorrow.

Boston Scientific (NYSE:BSX) has been halted this afternoon following news that it raised its third-quarter earnings expectations due to strong-than-anticipated sales in Europe of its new drug-coated stents. The company now forecasts a profit 28-30 cents per share compared to previous guidance of 24-28 cents per share. Investors are also focused on the firm's announcement set for later today regarding its clinical trials of its new stent. BSX is hoping to received approval from the FDA before the close of 2003.

In other news, IBM (NYSE:IBM) was upgraded from "neutral" to "buy," as the brokerage firm expects the company's chip business to improve and that its server business will continue to grab up market share. Applied Materials (NASDAQ:AMAT) was also lifted from "neutral" to "buy." On the other side of the coin, Motorola (NYSE:MOT) was downgraded from "outperform" to "neutral" due to valuation and market share losses because of Nokia's price cuts.

At 12:56 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 9458.2) is down 0.14 percent and the S&P 500 Index (SPX - 1015.69) is lower by 0.29 percent. The Nasdaq Composite (COMP - 1852.9) is down 0.11 percent. At 12:57 p.m. in the options pits, 842,047 calls and 588,139 puts traded for a composite put/call ratio across all five exchanges of 0.69. The CBOE put/call ratio for equity options weighed in at 0.56.

Johnson & Johnson (NYSE:JNJ) is being pounded this afternoon following BSX's positive news. JNJ was the first drug company to have its drug-coated stent approved by the FDA. The entrance of BSX's stent could seriously disrupt JNJ's dominance in the marketplace. The shares have plowed through support at their 10-day moving average and fallen back below resistance at their 10-week moving average. The equity has also run into resistance at its 20-week trendline. In fact, JNJ has not enjoyed a weekly close above its intermediate-term moving averages since May.

From a sentiment standpoint, it looks like investors are just starting to grow skeptical of the drug company. The security's Schaeffer's put/call open interest ratio sits at 0.71, but is still well below its July peak above 1.0. In fact, JNJ's September 50 put as traded more than 11,500 contracts while its October 50 put has seen more than 6,300 contracts change hands. However, short interest plunged 18 percent over the most recent reporting period to 19.2 million. This is only 2.42 times its average trading volume. This stock may have further room to fall since sentiment is still far from a pessimistic extreme.

Click the following link to see the Weekly Chart of JNJ since March 2003 with 10-Week and 20-Week Moving Averages:

http://www.schaeffersresearch.com/wire?ID=8456 .

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About Schaeffer's Investment Research (www.SchaeffersResearch.com)

Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com , is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method .